R 172014Z APR 12

ALCGFINANCE 013/12
SUBJ: MONTHLY FINANCIAL AUDIT STATUS UPDATE - APRIL 2012
1. THIS IS THE SEVENTH IN A MONTHLY SERIES OF ALCGFINANCE MESSAGES
INTENDED TO IMPROVE FINANCIAL AUDIT COMMUNICATIONS AND INFORMATION
SHARING THROUGHOUT THE COAST GUARD.
2. CURRENT STATUS:
       A. THE FISCAL YEAR (FY) 2012 AUDIT READINESS EFFORT CONTINUES.
THE DHS OFFICE OF THE INSPECTOR GENERAL (OIG) AUDITOR IS VERY HEAVILY
ENGAGED IN THE AUDIT PLANNING PHASE AND HAS BEGUN ISSUING DOZENS OF
PROVIDED BY CLIENT (PBC) REQUESTS, AND IS CONDUCTING UNIT
WALK-THROUGHS ACROSS THE CG. THE AUDITORS ARE SCHEDULED TO VISIT PPC
TOPEKA, ALC, SFLC, AND FINCEN IN THE COMING MONTH AND WILL LIKELY
ACCOMPANY CEU VISITS FOR REAL PROPERTY ASSET ENROLLMENT EFFORTS.
       B. TIMELY RESPONSE TO PBC REQUESTS IS CRITICAL TO OUR AUDIT
SUCCESS FOR FY 2012. IN FY 2011, THE AUDITORS SAMPLED THOUSANDS OF
UNDELIVERED ORDERS (UDOS). FOR FY 2012, THE AUDITORS INTEND TO
INSTEAD FOCUS MORE ON FINANCIAL EXPENSES, AND WILL AGAIN SAMPLE
THOUSANDS OF TRANSACTIONS. MORE INFORMATION ON WHAT, EXACTLY THE
AUDITORS WILL BE LOOKING FOR IS FORTHCOMING.
       C. MUCH HARD WORK IS BEING ACCOMPLISHED IN THE FIELD AND AT
THE
SERVICE AND LOGISTICS CENTERS, AND THE AUDITORS ARE REPORTING WE ARE
FAR AHEAD OF THE PACE FROM LAST YEAR. WELL DONE. ADM PAPP, OUR
COMMANDANT, IS MAINTAINING A KEEN INTEREST IN WHAT YOU ARE DOING.
PLEASE SEE THE FOLLOWING LINK TO HIS VIDEO MESSAGE ON THE IMPORTANCE
OF THE FY 2012 FINANCIAL AUDIT:
http://cgvi.uscg.mil/media/main.php/f/Audit2012.
3. MONTHLY AUDIT TIPS:
       A. THE EXTERNAL AUDITORS OBSERVED THE MARCH 2012 CAPITALIZED
PROPERTY PHYSICAL INVENTORY AT SELECTED UNITS. FROM THEIR
OBSERVATIONS, IT APPEARS NOT ALL UNITS ARE FOLLOWING THE ESTABLISHED
INVENTORY PROCEDURES. THESE OBSERVATIONS PRIMARILY CENTERED ON THE
FACT THAT, THOUGH UNITS WERE APPROPRIATELY VALIDATING THE PROPERTY ON
THE UNITS INVENTORY LISTS (EXISTENCE), UNITS OFTEN FAILED TO VALIDATE
THAT THERE WERE NO ADDITIONAL PROPERTY ITEMS ON SITE THAT DID NOT
APPEAR ON THE INVENTORY LISTING (COMPLETENESS). AUDITORS WILL OBSERVE
EACH AND EVERY PHYSICAL INVENTORY IN THE FIELD FOR THE FORESEEABLE
FUTURE.
       B. TO BEST PREPARE FOR AN AUDITORS OBSERVATION OF YOUR UNITS
INVENTORY PROCEDURE, FIRST FOLLOW THE PUBLISHED COMDT (CG-844)
GUIDANCE ON THE CG PORTAL. DURING THE INVENTORY, WALK THROUGH EACH
AND EVERY SPACE ON YOUR UNIT AND VALIDATE THAT NO ADDITIONAL
CAPITALIZED PROPERTY IS ON SITE. IF IN DOUBT AS TO WHETHER AN ITEM
MIGHT BE ABOVE THE CAPITALIZATION THRESHOLD (25K BEFORE 2003, 50K
AFTER 2003), VALIDATE THE ASSET RECORD THROUGH YOUR LOCAL
STOREKEEPER/FINANCIAL MANAGER. ALLOWING THE AUDITORS TO OBSERVE THIS
PROCESS WILL PROVIDE TREMENDOUS ASSURANCE THAT THE COAST GUARD IS ON
TOP OF THESE ISSUES.
4. AUDIT 101: HERE ARE THE FINANCIAL AUDIT PROFESSIONAL DEVELOPMENT
ITEMS FOR THIS MONTH: THERE ARE FIVE (5) FINANCIAL ASSERTIONS THAT
MUST BE PROVEN TO AN EXTERNAL AUDITOR. THESE ASSERTIONS ARE:
       A. COMPLETENESS: PROOF THAT ALL ASSETS, LIABILITIES, AND
TRANSACTIONS THAT SHOULD BE REPORTED HAVE BEEN INCLUDED AND NO
UNAUTHORIZED TRANSACTIONS OR BALANCES ARE INCLUDED.
       B. EXISTENCE AND OCCURRENCE: PROOF THAT ALL REPORTED
TRANSACTIONS ACTUALLY OCCURRED DURING THE REPORTING PERIOD AND ALL
ASSETS AND LIABILITIES EXIST AS OF THE REPORTING DATE.
       C. RIGHTS AND OBLIGATIONS: PROOF THAT ALL ASSETS ARE LEGALLY
OWNED BY THE AGENCY AND ALL LIABILITIES ARE LEGAL OBLIGATIONS OF THE
AGENCY.
       D. VALUATION: PROOF THAT ALL ASSETS AND LIABILITIES HAVE BEEN
PROPERLY VALUED, AND WHERE APPLICABLE, ALL COSTS HAVE BEEN PROPERLY
ALLOCATED.
       E. PRESENTATION AND DISCLOSURE: PROOF THAT THE FINANCIAL
REPORT
IS PRESENTED IN THE PROPER FORM AND ANY REQUIRED DISCLOSURES ARE
PRESENT.
       F. IF YOU ARE LOOKING FOR ADDITIONAL INFORMATION ON FINANCIAL
AUDIT READINESS, PLEASE GO TO THE CG PORTAL PAGE FOR THE OFFICE OF
FINANCIAL MANAGEMENT TRANSFORMATION AND COMPLIANCE (CG-85) AT
https://collab.uscg.mil/lotus/myquickr/cg-85-office-of-financial-tran
sformation.
THERE, YOU WILL FIND INFORMATION, TRAINING MATERIALS AND LINKS TO
OTHER AUDIT RELATED RESOURCES UNDER THE "AUDIT BASICS" TAB.
5.  MS. MARGO SHERIDAN, DIRECTOR OF FINANCIAL OPERATIONS/COMPTROLLER,
SENDS.
6.  INTERNET RELEASE AUTHORIZED.